Interesting, if I am understanding that correctly, there does need to be a resistor (maybe between +5V and one of the outer pot lugs) of about 100ohms, just to prevent the resistance across the pot from ever being 0. Correct?

Sounds good to me, I will remove the resistors from the pots and save myself some money

How about the Arduino / ATMega328 set up in the schematic? Did I configure the chip so that it will work correctly (once it has been programmed with my Arduino sketch by an external ISP on breadboard)?

The last couple days I've been looking into getting my PCBs manufactorured someplace, and have come to the realization that I need to make my boards as small as possible to keep costs down. I'm thinking of either going with BatchPCB or Olimex, and I see that BatchPCB charges $2.50/sq inch of board. At my previous board size (2.66x2.0"), that meant spending about $70 bucks (with set up fees) to print just five of my boards! That seemed like a bit much, and would mean that the PCB would cost about as much as the entire enclosure I'm fabricating through Ponoko.

I've gone back and revised my PCB design to be as tight as possible. I downloaded a board file for another device I have laying around (Daisy MP3 Player) and used it as a guide to see how close I could get my components.

Here is my revised board file: can someone with more experience with printing PCBs than me tell me if I need to space things out more, or use different packages, etc?

Use smaller parts.For IO holes, go with MA03-1, MA04-1, MA03-2. There's no reason those holes can't be 0.1" spaced, like the pads of the ICs.Use a smaller resistor for the 10K pullup. If you stand it up on end, you can get its two leads in two holes that are 0.1" apart.

The resistors for the LEDs, why are they so big? Those must be 5W packages?P=I^2 x R, do the math for them, see if you can use something smaller,save some room there too.

Alright, I have updated all of the holes to be standard .1" headers (I like them a lot better!), and updated the power resistors packages to be vertical. By re-arranging the parts a little bit, I was able to reduce the board a good amount and get the price per board around $2.30

The resistors I am using are 2W power resistors, and their datasheets say they are 4mmx12mm - the nearest part in the Eagle libs was R-US0414, which I chose the 'vertical' layout of.

Now I'm just curious, are things TOO close together now? Especially the IC sockets and the crystal in the lower left.

Took me a while to figure them out. If you have a ground plane(s) it can make the routing easier, as ground is usually one of the more common connections.I would use all the time if able. Read elsewhere that this could save on etching fluid if making your own boards, that much less copper to remove. I do it for the noise reduction from higher switching speed lines (course, nothing here is really high speed, look at how well things work on breadboards with wires hanging all over the place!)

I haven't tried this myself, but having one layer be ground and one layer be +5V would also give you in effect a big capacitor also (haven't calculated how much, plugging the 2 plate sizes, distance between them, and maybe the copper thickness, into an excel equation would yield the answer quite handily). I'm not sure I like the idea of having a big exposed area of +5V tho, even with solder mask over it. On a 4 layer board it would be a middle layer and not exposed.

The hardest part I found is getting the polygon closed when you get back to the corner; you get an "invalid polygon error" if not done right. With a 80x100mm board, you can't zoom in to see because you have to be zoomed out to see the other corners. Takes a few tries.

Also took a me a few tries to get rectangles under the tabs of voltage regulators. Add vias to connect the top & bottom layers, then you still have to connect the vias together!